Secondary bond market starts off slow

• Rupee depreciates slightly

By Wealth Trust Securities

The secondary bond market kicked off the trading week on a subdued note, with market participants taking a cautious approach ahead of this week’s Monetary Policy Review which is due on Wednesday, 24 July.

Limited trades were observed on the maturities of 01.02.26, 15.12.26, 01.09.28 and 15.09.29 at levels of 10.20%, 10.45%, 12.00% and 12.03% respectively. Additionally, the medium tenor 15.05.30 and 01.12.31 maturities were seen trading at the rates of 12.15% and 12.4225% to 12.41% respectively.

In contrast, the secondary bill market experienced considerable activity and sizeable transaction volumes. Short-term maturities of August 2024 (approximately one month) and September 2024 changed hands at rates of 9.00% and 9.12%, respectively. The November 2024 maturities (approximately three months) were transacted at a rate of 9.40%. Meanwhile, May to July 2025 maturities saw transactions within the range of 9.85% to 9.95%.

The total secondary market Treasury bond/bill transacted volume for 19 July was Rs. 25.04 billion.

In money markets, the weighted average rate on overnight call money was at 8.76% and repo was at 8.91%.

The net liquidity surplus increased to Rs. 111.43 billion yesterday, an amount of Rs. 131.44 billion was deposited at Central Banks SDFR (Standard Deposit Facility Rate) of 8.50%. 

The DOD (Domestic Operations Department) of Central Bank injected liquidity by way of an overnight reverse repo auction for Rs. 20.00 billion at the weighted average rate of 8.73%.

Forex Market 

In the Forex market, the USD/LKR rate on spot contracts closed the day at Rs. 304.00/304.20 against its previous day’s closing level of Rs. 303.55/303.65.

The total USD/LKR traded volume for 19 July was $ 30.50 million.

(References: Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)